AT A time when geopolitical tensions are hitting industries from semiconductors to electric vehicles, pharmaceutical dealmaking has become a rare bright spot for collaboration between China and the West. Industry watchers are holding their breath to see how the incoming Trump administration changes that.

So far this year, seven major pharma companies have licensed or acquired molecules for new drugs originating from China, spending a total of at least US$3.15 billion in upfront cash and equity, according to DealForma. Others are boosting their on-the-ground presence in the hope of finding diamonds in the rough.

Every major drugmaker’s head of R&D has been to China at least once in the last year, according to an October report from Stifel Financial’s investment banking unit. AbbVie and Bristol-Myers Squibb have hosted dedicated partnering days in Shanghai to meet with local companies, while companies such as Roche Holding, Bayer and Eli Lilly have opened or will open incubators to build relationships with early-stage startups. At a recent, widely watched trade expo, Pfizer announced it will invest US$1 billion in China over the next five years, in part to work with local companies.

Even as US and European pharma companies decouple other parts of their businesses – moving away from Chinese research and development providers and creating separate production facilities in China, for China – biotech deals are looking too attractive to pass up.

“I have never seen so many multinationals coming to China searching,” said Darren Ji, the former head of Roche’s partnering activities in Asia and emerging markets. He added that the Shanghai biotech he co-founded and leads, Elpiscience Biopharmaceuticals, has entertained several multinationals.

China has a long history as an outsourcing hub for foreign pharmaceutical companies and as a producer of “me too” drugs that mimic what’s already on the market. Now, it is becoming a key hunting ground for truly novel therapies, in part thanks to a government initiative that has thrown support behind several cutting-edge industries. China h...